EUR/AUD Price Analysis — December 31

31 December 2020 | Updated: 31 December 2020

The EUR/AUD continued on a bearish decline in the early European session on Thursday, as the risk-backed Aussie soars amid efforts by the ECB to weaken the Euro.

ECB Governing Council Member Oli Rehn reiterated comments made by other ECB members—like President Christine Lagarde, Francois Villeroy de Galhau, and Philip Lane—that ‘jawboned’ the EUR. Comments like that are structured to disrupt the growth rate of the EUR, especially against the US dollar (DXY). In this case, the GCM hinted that if the Euro continues to appreciate the ECB will “do something about it.”

However, except the bank is ready to ease monetary conditions further by cutting interest rates and increasing asset purchase pace, analysts believe that the ECB is just bluffing. Already, the bank had announced earlier in December that its goal at the moment was to maintain its already-eased monetary policy, probably for an extended period. This detail makes analysts even more convinced that the ECB was bluffing when it noted that it could ease monetary conditions further.

Meanwhile, the Aussie got an additional price boost from an upbeat data release from China’s official Purchasing Managers Index (PMI) for December. The National Bureau of Statistics (NBS) of China reported that December’s Manufacturing PMI dropped from 52.4 to 51.9, while the Non-Manufacturing PMI rose past the 56.4 previous readouts to 55.7.

That said, the AUD is expected to keep gaining against the EUR in the coming days.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — December 31

EUR/AUD Major Bias: Bearish

Supply Levels: 1.6008, 1.6100, and 1.6200

Demand Levels: 1.5900, 1.5800, and 1.5675

The EUR/AUD currently barrelling towards the 1.5900 level, and we could see lower in the coming days. Bears got a confirmation yesterday following the break below the crucial 1.6008 pivot point.

Meanwhile, the pair is still some distance away from oversold conditions, meaning more declines are likely in the coming days. However, it’s worth mentioning that the current bearish momentum could be negated if the EUR/AUD finds healthy demand around the 1.5900 area.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.